TENET HEALTHCARE CORPTHC
TENET HEALTHCARE CORP Revenue Disclosure
CONTRACT BALANCES
Hospital Operations Segment
Our Hospital Operations segment’s contract assets and liabilities primarily derive from: (1) patients receiving ongoing inpatient care from one of our facilities at the end of the reporting period; and (2) timing differences between our performance of revenue cycle management and other contract-based services and the invoicing or receipt of payment for these services. Our Hospital Operations segment’s contract assets were included in other current assets, and its contract liabilities were included in other current liabilities or other long‑term liabilities, depending upon when we expect to recognize the underlying revenue, in the accompanying Consolidated Balance Sheets at December 31, 2025 and 2024.
The opening and closing balances of our Hospital Operations segment’s receivables, contract assets, and current and long‑term contract liabilities were as follows:
| Receivables | Contract Assets – Unbilled Revenue | Contract Liabilities – Current Deferred Revenue | Contract Liabilities – Long-Term Deferred Revenue | |||||||||||||||||||||||
| December 31, 2024 | $ | 28 | $ | 190 | $ | 80 | $ | 13 | ||||||||||||||||||
| December 31, 2025 | 26 | 188 | 88 | 13 | ||||||||||||||||||||||
| Increase (decrease) | $ | (2) | $ | (2) | $ | 8 | $ | — | ||||||||||||||||||
| December 31, 2023 | $ | 21 | $ | 208 | $ | 59 | $ | 12 | ||||||||||||||||||
| December 31, 2024 | 28 | 190 | 80 | 13 | ||||||||||||||||||||||
| Increase (decrease) | $ | 7 | $ | (18) | $ | 21 | $ | 1 | ||||||||||||||||||
The differences between the balances of our contract assets at December 31, 2025 and 2024 and the differences between December 31, 2024 and 2023 were both primarily related to patients who were receiving inpatient acute care and specialty hospital services as of each year‑end date, but who were discharged during the following year. In the years ended December 31, 2025 and 2024, we recognized revenue totaling $60 million and $58 million, respectively, from our revenue cycle management services that was included in the opening current deferred revenue liability. This revenue consists primarily
of prepayments for those contract clients who were billed in advance, changes in estimates related to metric‑based services and up‑front integration services that are recognized over the service period.
Contract Costs—We recognized amortization expense related to deferred contract setup costs of $6 million, $3 million and $5 million during the years ended December 31, 2025, 2024 and 2023, respectively. At December 31, 2025 and 2024, unamortized client contract setup costs were $13 million and $19 million, respectively, and were presented as part of investments and other assets in the accompanying Consolidated Balance Sheets.
NET OPERATING REVENUESNet operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, and managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Hospital Operations segment also include revenues from providing revenue cycle management and value‑based care services to hospitals, health systems, physician practices, employers and other clients.
The table below presents our sources of net operating revenues:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Hospital Operations: | ||||||||||||||||||||
| Net patient service revenues from hospitals and related outpatient facilities: | ||||||||||||||||||||
| Medicare | $ | 2,119 | $ | 2,132 | $ | 2,383 | ||||||||||||||
| Medicaid | 1,524 | 1,439 | 1,233 | |||||||||||||||||
| Managed care | 9,696 | 9,809 | 10,248 | |||||||||||||||||
| Uninsured | 52 | 64 | 96 | |||||||||||||||||
| Indemnity and other | 551 | 522 | 590 | |||||||||||||||||
| Total | 13,942 | 13,966 | 14,550 | |||||||||||||||||
Other revenues(1) | 2,196 | 2,175 | 2,148 | |||||||||||||||||
| Total Hospital Operations | 16,138 | 16,141 | 16,698 | |||||||||||||||||
| Ambulatory Care | 5,172 | 4,534 | 3,866 | |||||||||||||||||
| Net operating revenues | $ | 21,310 | $ | 20,675 | $ | 20,564 | ||||||||||||||
| (1) | Primarily revenue from physician practices and revenue cycle management. | |||||||
Adjustments for prior‑year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased (decreased) revenues in the years ended December 31, 2025, 2024 and 2023 by $23 million, $(4) million and $24 million, respectively. Estimated cost report settlements receivable, net of payables and valuation allowances, were included in accounts receivable in the accompanying Consolidated Balance Sheets (see Note 3). We believe that we have made adequate provision for any adjustments that may result from the final determination of amounts earned under all the above arrangements with Medicare and Medicaid.
The following table presents the composition of net operating revenues for our Ambulatory Care segment:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Net patient service revenues | $ | 4,956 | $ | 4,356 | $ | 3,713 | ||||||||||||||
| Revenue from other sources | 216 | 178 | 152 | |||||||||||||||||
| Net operating revenues | $ | 5,172 | $ | 4,534 | $ | 3,865 | ||||||||||||||
Performance Obligations
The following table includes revenue from revenue cycle management services that was expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at December 31, 2025:
| Years Ending December 31, | Later Years | |||||||||||||||||||||||||||||||||||||||||||
| Total | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||||||||||||||||
| Performance obligations | $ | 5,126 | $ | 748 | $ | 747 | $ | 747 | $ | 747 | $ | 747 | $ | 1,390 | ||||||||||||||||||||||||||||||
The amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume‑ or contingency‑based contracts, variable‑based escalators, performance incentives, penalties or other variable consideration that is considered constrained. As of December 31, 2025, our contract with CommonSpirit Health (“CommonSpirit”), a successor to Catholic Health Initiatives (“CHI”) and the minority interest holder, as of such date, in our Conifer Health Solutions, LLC joint venture (“Conifer”), represented the majority of the fixed‑fee revenue related to our remaining performance obligations; prior to the subsequent event described in Note 25, Conifer’s contract term with CHI was scheduled to end on December 31, 2032.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 25, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.